In-Stat, we provide Numbers

• The Digital Entertainment Ecosystem

• Broadband Speeds by Technology

• Broadband penetration versus Pay-TV and Free TV services

• The Race for VOD and HD-VOD

• How many PEOPLE are in the mix?

Broadband Speeds: How Much is Enough?

Broadband Access Technologies: Average Speeds

Downstream Speed (Mbps)

Upstream Speed (Mbps)

Cable Modem 4.90 Mbps 1.17 MbpsDSL 2.08 Mbps 0.56 MbpsFTTH 8.82 Mbps 2.81 MbpsFixed Wireless 0.92 Mbps 0.49 MbpsSatellite Broadband 1.08 Mbps 0.25 MbpsOther 2.28 Mbps 1.04 MbpsAverage: All Access Technologies 3.80 Mbps 0.98 MbpsSource: In-Stat, 12/07

• 2 Gigabyte file takes 30 minutes to download on FTTH

• 12 Gigabyte HDTV files will take three hours on FTTH

• Concurrency (many simultaneous users) slows this downUS Residential Broadband Speeds

Service Penetration in US Households

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2002 2003 2004 2005 2006 2007 2008 2009 2010

Broadband

Digital Cable

Satellite

Analog Cable

Over-the-air

TelcoTV

Source: In-Stat, 10/08

The Race for HD VOD• By 2012, 45% of US HHs will have VOD, 35% will have HD-VOD

• By 2012, about 35% of US HHs will have Broadband > 10 Mb/s

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

2007 2008 2009 2010 2011 2012

Broadband HHs w ith 10 Mb/s service

TV HHs w ith Digital VOD service

TV HHs w ith HDTV VOD service

Source: In-Stat, 10/08

Entertainment

Voice and SMS

Computing

•iPod

•Feature phone

•iTouch

•Mobile Internet Device

•Portable Media Player

Multimedia phone

•Cellphone Ultra-Mobile PCBlackBerry

Cellular Devices

Portable Entertainment

Devices

Ultra Mobile Devices

•Personal Nav Device

•iPhone

Portable Digital/SatRadio Receiver

Smartphone

Mobile Boundaries are Blurring

How Many People Are Involved?

• By 2012, 250 Million People in the US will be accessing Content for use with TV, PC, Mobile or Portable Devices

0

50,000,000

100,000,000

150,000,000

200,000,000

250,000,000

300,000,000

2006 2007 2008 2009 2010 2011 2012

<14 15-24 25-34 35-44 45-54 55-64 65+Source: In-Stat, 10/08

Conclusions

• We need Peer-to-Peer Networks to deliver all this stuff economically

• Distributed Networks need to be:– Efficient and well-mannered– Managed to control applications– Secure to protect content, transactions and users

• Finally, need to create revenues !

http://www.in-stat.comElaine Potter, ManagerTel: +1.480.483.4441epotter@reedbusiness.com

Gerry Kaufhold, Principal AnalystVoice: 520 363-9752gkaufhold@reedbusiness.com